The House of Representatives has approved the tax reform bills, introducing key changes to the nation’s tax structure while retaining the current Value Added Tax (VAT) rate at 7.5%.
A major highlight of the reform is the revised VAT sharing formula. According to the new structure, VAT revenue will now be distributed as follows:
- 50% to be shared equally among states,
- 20% to be allocated based on population,
- 30% to be distributed according to consumption levels.
Additionally, the House addressed concerns over the proposed inheritance tax, amending the controversial clause to clarify that any inheritance received before the dissolution of an estate will not be subject to taxation.
The legislative body also approved provisions for the continued funding of key national development agencies, including the Tertiary Education Trust Fund (TETFUND), the National Agency for Science and Engineering Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA). These agencies will continue to receive funding through the development levies fund.
The passage of these tax reform bills marks a significant step in Nigeria’s fiscal policy, aiming to enhance revenue generation while ensuring equitable distribution across the country.
